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For-Profit Group Tries New Approach, Again

Steve Gunderson has plenty of friends, including the Senate's leading critic of for-profit colleges. But the new head of the sector's trade group isn't afraid to pick a fight -- even with one of his members.

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Steve Gunderson is determined to stay positive as the leader of for-profit colleges’ primary trade group. It won’t be easy.

The former Republican Congressman from Wisconsin will need to use all the political persuasiveness he picked up during 16 years as a moderate dealmaker on Capitol Hill -- and then some -- to rise above the fray as the new president of the Association of Private Sector Colleges and Universities.

Just a month into the job, Gunderson has told the association's members to resist the temptation to bash traditional higher education. That’s a difficult ask for some for-profits, who feel they’ve been unfairly targeted by lawmakers and the news media and have at times responded by citing shortcomings in other sectors, like low graduation rates at community colleges.

Gunderson, however, has long been a friend to higher education, and plans to keep it that way. But in an interview with Inside Higher Ed (excerpts of which can be found in a podcast here), Gunderson said he won’t back down from a fight, even if it’s with one of his own members.

The for-profit trade group needs to develop strong self-regulation guidelines that can be enforced, Gunderson says. That means that when a member runs afoul of what the group defines as acceptable behavior, the resulting punishment should be both substantial and public.

Gunderson has yet to hold his first meeting with the association’s board of directors, and stresses that his goal for a code of conduct with an enforcement mechanism is far from being a reality. But he says it will be one of his top goals as the group’s leader, and that he has discussed the idea with industry insiders.

Other such efforts exist, including the voluntary standards created by the Coalition for Educational Success, an upstart for-profit trade group, and an accord signed by a coalition of 20 regionally accredited for-profits, led by Dario Cortes, president of Berkeley College. APSCU has its own member code of conduct, adopted in 2010. But Gunderson wants to go beyond the association’s fairly general guidelines.

“Self-regulation can prevent government regulation,” he says.

Perhaps the biggest hurdle with voluntary standards, he says, is coming up with rules that will be respected beyond the industry. That’s because critics of for-profits will be suspicious of any attempt at self-regulation. Gunderson says the effort needs to start with association members and receive some form of outside validation.

A good code would add value, Gunderson said, rather than duplicating the oversight of states, accreditors and the U.S. Department of Education.

“One of the challenges in self-regulation is figuring out what we do that isn’t already done,” he says.

When pressed on how an enforcement scenario might play out under a strengthened code, Gunderson cites an example from his previous job, as president of the Council on Foundations. The council placed the J. Paul Getty Trust on probation in 2005, after the trust refused to comply with a council request to turn over financial documents.

The Getty, which is one of the world’s largest art institutions, was under investigation by California’s attorney general for alleged abuse of funds by executives. That investigation triggered a council review under an ethics policy Gunderson had championed. After the Getty refused to comply with that review, Gunderson announced the council’s first-ever suspension.

The news fueled a publicity disaster for the Getty. The council, however, drew praise from Sen. Charles Grassley, an Iowa Republican who has often criticized wasteful spending by nonprofits, including colleges. (The council restored the Getty’s full membership a year later.)

Gunderson’s Getty example is relevant to higher education for several reasons. The for-profit association would generate plenty of headlines if it suspended one of its larger members -- a publicly-traded for-profit chain, for example. And that move might please another regulatory-minded senator from Iowa who has become the most visible critic of for-profit colleges (see below).

But for Gunderson to publicly shame a major for-profit college would be a much more difficult maneuver than the council’s Getty suspension. Art foundations aren’t accustomed to the level of heat for-profits are feeling, and they’re not as good at fighting back.

Big Tent

Higher education associations say Gunderson is a savvy choice for the public face of for-profits. Frequent opponents of the industry, like consumer advocates, have praised Gunderson’s appointment. And he even has deep ties to Sen. Tom Harkin, the Iowa Democrat who has led much of the policy pursuit of for-profits.

Gunderson considers Harkin a personal friend. They bonded during their days leading the Agriculture Subcommittee on Livestock, Dairy, and Poultry in the U.S. House of Representatives, back in the 1980s. Gunderson has reached out to Harkin as APSCU’s leader, and hopes to make progress repairing the rift between for-profits and the senator, although he’s not naïve about how hard that will be.

As a former congressman, Gunderson takes the legislative process seriously. He’s already responded formally to a salvo by Harkin’s committee on military tuition benefits that other for-profit leaders might have ignored as saber-rattling in an election year, when Congressional action is unlikely.

Besides Harkin, Gunderson has contacted others in Washington who haven’t been friendly to for-profits, including Arne Duncan, the Obama administration’s secretary of education, and several leaders of nonprofit college associations, earning a few plaudits along the way.

The for-profit group has tried to change course before, most recently with an attempt to forge better ties to the rest of higher education when Gunderson's predecessor, Harris Miller, was hired five years ago. That fizzled as for-profits battled against what many saw as an existential challenge from Washington.

Gunderson, however, already runs in traditional higher education circles. The week his appointment was announced, Gunderson was in Miami for a conference held by the American Association of Community Colleges. He spoke at the event, and told community college presidents about his new gig, stressing his party line so far: for-profits are part of the national solution to serving nontraditional students.

“He’s going to be a good partner for us,” says Walter G. Bumphus, the community college group's president.

Richard Ekman, president of the Council of Independent Colleges, says Gunderson was an effective congressman and has been a strong advocate for traditional higher education. “The for-profit sector is very fortunate to have engaged him.”

But Ekman says Gunderson has a big job ahead if he wants to clean up the industry. And for now, small private colleges probably won’t be working closely with for-profits.

“I don’t see much to be gained by nonprofit independent colleges trying to cooperate with a group that is so dominated by bad actors,” Ekman says.

‘Unified Voice’

Gunderson will also work to strengthen APSCU’s role within the for-profit sector itself. Some commercial colleges felt the association was flat-footed in its early response to the Obama administration's push to impose new "gainful employment" rules, and decided to focus instead on their own lobbying and public relations efforts. Dissatisfaction with the association also helped lead to the creation of the Coalition for Educational Success.

Miller stepped down as the association’s president last year. For-profit leaders praised the performance of Brian Moran, who took over as an interim and is now executive vice president of government relations and general counsel. But they also said they were excited to have Gunderson on board. It helps that Gunderson will add his Republican bona fides to the leverage Moran, a prominent Virginia Democrat, has on the other side of the aisle.

Penny Lee, the Coalition for Educational Success’s managing director, says she has met with Gunderson to discuss the coalition’s voluntary standards. She says her group had no intention of shuttering with Gunderson’s arrival, but looks forward to working with him.

“We are engaging with him and want to have a unified voice,” Lee says.

Cortes agrees, saying he is glad to hear that Gunderson wants to “address transparency” in the industry with a standard of conduct.

That idea will be tough to execute, Cortes says, in part because APSCU must represent all of its 1,800 members, which include small institutions like La Belle Beauty School, located in Miami, and corporations like Kaplan Higher Education. (The University of Phoenix is not a member, but no doubt holds some influence over the association.)

Starting small can be easier, Cortes says. But he thinks Gunderson is right to push APSCU to take the lead. “I think it could work, but he’s got a long road ahead,” he says.

In many ways, APSCU’s challenge within its industry mirrors that of the American Council on Education. The umbrella organization for higher education must represent the interests of all its members, which range from public and private research universities to private religious colleges to community colleges.

Gunderson wants APSCU to make that challenge a little tougher for ACE. He says he has filed paperwork for the association to rejoin the council. Several years ago the for-profit group, then called the Career College Association, quit ACE after not being included in meetings for leaders of higher education associations.

Gunderson himself bridges the divide, holding degrees both from Brown College, a for-profit where he studied broadcasting, and the University of Wisconsin at Madison. He feels good about his chances of helping for-profits be more accepted, in higher education and beyond. While he knows many of the players in the debate over the industry’s future, he’s never represented the for-profit side before.

“One of the great things about being new," he says, "is that you don’t have a history.”